Two weeks ago I wrote about the work that I am doing on the Medicaid Expansion Study Commission and mentioned the Health Insurance Premium Payment Program, or HIPP Program. Since I received a number of emails from you asking for more information about the program and what role it may play in Medicaid expansion, I am writing about it today.

The Medicaid expansion population includes adults with or without children who make 0-138% of the federal poverty level (FPL), meaning individuals who earn less than $15,500 annually. Many people in the expansion population work in low-paying jobs, often doing seasonal work or in the hospitality industry. Currently, only parents who make less than 54% of FPL (earning less than $6,300 annually) are eligible for Medicaid. So, childless adults and parents making more than 54% of FPL define the expansion population.

The HIPP Program currently exists under Medicaid. It is a fairly small program that covers only about 180 individuals, given the low number of adults currently eligible for Medicaid. It is designed to be a cost-saving mechanism for the state for when an individual who qualifies for Medicaid is offered private insurance by his/her employer and can’t afford the co-payments or premiums. Rather than simply offering traditional Medicaid and picking up the entire cost of care, the state can offer to pay the premiums and co-pays if, and only if, that will be less expensive for the state. The benefit, in addition to saving taxpayer dollars, is that patients can participate in a private plan that will follow them as their incomes rise. This also avoids the flipping between being eligible and ineligible for Medicaid, preventing what policy experts call “churn” between Medicaid and being uninsured – this saves the state considerable administrative costs. The added bonus is that providers get reimbursed at the private rate rather than the Medicaid rate. Given the small number of people currently participating in the HIPP Program, many of us probably have not seen this in our offices; in fact, it is invisible to us because patients present their private insurance card.

Under expansion, the universe of patients eligible for Medicaid grows significantly – a low estimate is that approximately 10,000 individuals would be eligible for the HIPP Program. These people would have the choice of Medicaid or their employer-sponsored insurance. This means that 10,000 low-income people in New Hampshire would have their private insurance paying the rates that you or your employer negotiated with the insurer. This is infinitely better than uncompensated care and significantly better than Medicaid reimbursement rates. More importantly, people will have access to the care they need.

The state could easily and quickly expand the HIPP Program without any major changes in how Medicaid is currently structured. Some other states have asked for special permission to waive the rules of Medicaid, take away an individual’s choice and mandate that the individual pursue a private option through his/her employer or the exchange. None have been approved yet, and the application process is lengthy. Arkansas has the best chance of getting a waiver to do a mandated HIPP-type program and has been working with CMS for about a year on its application, which was submitted last week. The earliest Arkansas expects to hear back is in October. If New Hampshire chooses to pursue a waiver it will result in delays and loss of federal funds to the state and impact access to care for thousands of our citizens.

I believe a New Hampshire solution would be to expand Medicaid using our existing resources, including the HIPP program, and then spend the next year carefully considering what innovations we want to initiate to enhance care or decrease costs, and then pursue a waiver at that time. This way we can take full advantage of federal funds, expand the HIPP Program – which is good for the state, patients and providers – and learn from experiments that are happening in other states.

 

Please send your questions or comments to president@nhms.org or post a comment below.